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Eurogroup boss Dijsselbloem says Greece likely to need even more help

The head of the Eurogroup of European finance ministers has said that Greece will likely need more help to get its economy back on track. However Jeroen Dijsselbloem said this didn’t necessarily mean another bailout.

Dijsselbloem told the European Parliament's Economic Affairs' Committee on Thursday that although Athens had made progress in implementing reforms designed to wrestle down its massive public debt, it still wasn't enough.

"As far as the potential need for a third program for Greece is concerned, it's clear that despite recent progress Greece's troubles will not - and I repeat - will not have been completely resolved by 2014," Dijsselbloem said.

However, he stressed that while Athens would need more help, "I have not spoken about a new loan for Greece." No decision on what form this additional aid might take is expected to come before next April, when Greece is to undergo a debt sustainability review.

He also said that the Eurogroup was determined to help Athens get back onto its financial feet.

"We have always said that we stand ready to help Greece, right up to the moment that they have regained access to financial markets - on the condition that they will comply with all the conditions of the program," he said.

Schäuble's warning

Dijsselbloem is not the first figure to speculate about the possibility that Greece will need even more than the 240 billion euros ($317 billion) in international bailout funds that it has already received.

German Finance Minister Wolfgang Schäuble stirred up a political storm last month when he warned that Greece could need a third bailout. Ever since, Greece has been a big issue in the campaign for Germany's September 22 general election.

On Monday he told lawmakers in the Bundestag's budgetary committee that this was due to unforeseen problems in the Greek government's efforts to implement austerity measures it agreed to in return for two bailouts financed by the European Union, the European Central Bank and the International Monetary Fund.

Sluggish pace of privatization

Among the problems he cited was Greece's privatization program, which hasn't been progressing as quickly as the country's creditors would like.

Athens recently revised its target for sales for 2013 downwards to 1.6 billion euros from the previous goal of 2.6 billion. This came just weeks after its privatization efforts suffered a major setback when Russian gas giant Gazprom pulled out of a deal to buy Greek state gas company DEPA. Greece had also failed to meet its privatization targets in 2012.

Schäuble has declined to go on the record with how much more help he thinks Greece might need. However, Germany's DPA news agency cited members of the budgetary committee who said he had put the figure at between four and 4.5 billion euros.

On Wednesday, Greece's finance minister, Yannis Stournaras, said Athens would need as much as 10.5 billion euros to plug gaps in the 2014 budget.

pfd/kms (AFP, dpa, AP)